Inflation is expected to peak at 29-pct in July; LKR to further depreciate

Inflation is expected to peak at 29% in July owing to potential price hikes in essential commodities like gas, electricity, and fuel prices, the First Capital Research said.

CCPI further increased to 18.7% in March, exceeding the CBSL’s and FC Research’s desired range of 4%-6% and 5%-7% respectively.

According to First Capital Research, the exchange rate is expected to overshoot until stability is achieved.

“There is likely to be continued volatility on the exchange rate level for limited time periods, over the next few months due to uncertainties on the economic and political fronts,” First Capital Research said.

During the year up to 22 April 2022, the Sri Lankan rupee has depreciated against the US dollar by 40.1 percent.

“We believe LKR to further depreciate and hover in a wide range by Jun-22. Based on the clarity on the country’s economic progress in the midst of debt restructuring and IMF negotiations, foreign inflows are gradually expected to flow into the country supporting a gradual appreciation by Dec-22.”

Exchange Rate

Related: Staff-level agreement with IMF is likely to be reached within next 2 months: CB Governor

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Nuwan
Nuwan
24 days ago

So when will FD rates will decrease

sam
sam
24 days ago

inflation will hit 40% when CEB rates are increased…